ICT market grows
to $436 million
Future expectations are promising
The size of the Information and Communication Technology (ICT) market reached $436 million last year after growing at a Compounded Annual Growth Rate (CAGR) of seven percent over the period 2014-2016, according to the Information Technology Factsheet released by the Investment Development Authority of Lebanon (IDAL).
The ICT market is expected to grow at a CAGR of 9.7 percent over the period 2017-2019.
The factors contributing to the growth of the ICT sector are rising income, declining device prices, and modernization initiatives taken by enterprises and the public sector, as well as improvements in the telecom infrastructure and business sentiment.
The market segment witnessing the greatest growth is the ICT services sector. This sector is projected to increase at a CAGR of 12.3 percent over the next three years.
Hardware sales represent the biggest chunk of the ICT sector (60 percent) but have recorded the lowest growth rate. Hardware sales rose to $262.2 million in 2016. The hardware market is still far from saturated as demand for computers, notebooks, and hybrids remains on a steady rise across various industries.
Sales of ICT services totaled $134.2 million in 2016, accounting for 31 percent of the overall ICT market.
The growth of ICT services is fuelled by a continuous increase in spending on e-services by the government, businesses, and telecom companies.
Support and maintenance constitute the largest share of spending on ICT services, however, demand for more complex services such as managed services, value added services, local outsourcing activities, and cloud services are expected to increase.
The software development business accounts for the remaining nine percent of the overall ICT market. This market segment amounted to $40 million in 2016, and is projected to grow at a CAGR of 10.1 percent over the coming three years.
The enforcement of intellectual property rights, reducing software piracy, and upgrading the ICT infrastructure have contributed to the steady rise in the software development sector in recent years, according to the report.
Around 80 percent of the companies engaged in ICT services and software development derive most of their revenues from abroad. These firms mainly export software applications and mobile applications.
Reported by Shikrallah Nakhoul
Date Posted: Oct 13, 2017